Inflation cooled down to 2.8% in June due to lower gas prices but the cost of filling up spiked again last month<\/p>\n
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Higher gas prices are expected to push Canada\u2019s inflation rate back up near three per cent for July, but economists believe the spike will only be temporary.<\/p>\n
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Statistics Canada is scheduled to publish its latest Consumer Price Index report on Monday morning, which will give an overview on inflation in July.<\/p>\n
Forecasts from CIBC Capital Markets suggest inflation reached three per cent in July after lower gas prices in June cooled it down to 2.8 per cent. A reading above three would be the highest since May, when inflation rose to 3.2 per cent due to the global oil price spike caused by Iran war.<\/p>\n
Andrew Grantham, executive director and senior economist at CIBC Capital Markets, said gasoline prices experienced a \u201cpartial rebound\u201d after the United States and Iran renewed strikes in early July, but didn\u2019t reach the peaks hit when the conflict first started earlier this year.<\/p>\n
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He also expects the recent gas price spike to be temporary, but noted that some prices are still under pressure.<\/p>\n
\u201cWe\u2019re still seeing that initial pass through from the first spike in global oil prices that we had over the spring,\u201d Grantham said in an interview, singling out higher airfares. \u201cThey\u2019re not as high as what we saw earlier this year, but these are year-over-year inflation rates, so they\u2019re still a lot higher than they were a year ago.\u201d<\/p>\n